Despite Administration Promises, Obamacare's Federal Exchange Still Isn't Fully Built—and Won't Be Until Next Year



The back end of Obamacare's federal exchange—the guts of the system designed to communicate with and manage payments to health insurers—still isn't finished, despite explicit promises from the administration that it would be finished months ago. And it may not be ready this year. 

A document posted by the administration yesterday lists requirements for the next tech contractor to work on the federal insurance portal, according to Politico, which reports that whichever company wins the next contract, which would begin when the administration's current contract with Accenture, the company that replaced the original contractor CGI earlier this year, runs out in 2015, "is also slated to help construct major back-end components of the site that insurers need to get paid accurately."

It's the latest indication that the administration is having a serious problem completing work on the federal exchange's crucial back-end payment systems.

Those systems were originally supposed to be ready last year when the exchanges first went live, but development resources were shifted when the project fell behind prior to its disastrous October launch. In November of last year, a federal health official responsible for Obamacare's exchange technology admitted that between 30 and 40 percent of the federal exchange system had not yet been built.

After the consumer end of the federal exchange began to work better in early December, insurers began to openly worry that the back end systems would not be ready in January 2014, as the administration had promised. "We want to be paid," one unnamed insurance executive told The New York Times. "If we want to pay claims, we need to get paid."

But later in December, Kathleen Sebelius, then the Health and Human Services (HHS) Secretary, was adamant that the new systems would be ready the following month. "The financial management system, which is getting the insurance companies their money for accelerated tax credits and cost-sharing, is due to go into effect in mid-January," she told a congressional committee subpanel.

Sebelius was wrong. The back end systems were not ready in mid-January. When the federal government switched contractors from CGI to Accenture at the beginning of 2014, it said in a document justifying the rapid award of a no-bid contract that timely completion of the payment systems was critical.

"Failure to deliver" the payment functionality "by mid-March 2014 will result in financial harm to the Government. If this functionality is not complete by March 2014, the Government could make erroneous payments to providers and insurers," the document warned. If the payment system is not complete, "the entire healthcare reform program is jeopardized." A missed deadline for completion could "potentially [put] the entire health insurance industry at risk."

The back-end financial systems were not ready in March, or in April. They are still not ready now. Insurers are relying on quasi-manual workarounds instead. And in April, the administration, which refused give an estimated timeline for completion of the back end financial management systems when questioned by Politico, indicated in a document that the workarounds would last at least until September of this year.

Insurer payments are not the only issue. Incomplete work on back-end systems also appears to be affecting the federal exchange's ability to verify income and citizenship for people who apply for coverage. A June report from the HHS Inspector General found more than 2.9 million inconsistencies in federal exchange applications as of the end of February, a figure that grew to 4 million as of the end of May. Most of those inconsistencies have not been resolved. Serco, the contractor charged with processing those inconsistencies, has blamed delays in the "eligibility support desktop (ESD) functionality" that was supposed to help deal with eligibility verification problems. Former HHS Sec. Sebelius certified in January the the exchange's eligibility verification systems were working. 

The newly posted contracting requirements seem to suggest that the administration now believes construction of the financial systems won't be complete this year at all, and will carry over to whichever tech contractor gets the job when Accenture's deal runs out. If it's not complete this year, then that will mean that it won't be operational during Obamacare's second open enrollment period this fall. 

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  1. These criticisms ignore the fantastic successes of the law.

    Which we can’t show you the data for.

  2. OT: as the world watches The Ukraine, it looks like Israel has launched an air, land and sea offensive on Gaza.

    On an unrelated note, I wonder if Obama will take advantage of this great weather and get 18 holes in today. Or is he still out fundraising?

  3. The back end of Obamacare’s federal exchange?the guts of the system designed to communicate with and manage payments to health insurers?still isn’t finished, despite explicit promises from the administration that it would be finished months ago.

    Paging PBPlug/Weigel, get your pudgy, pimply self to this thread STAT!

    1. Not a chance.

  4. What did you expect them to do? Admit that the Republicans were correct and that more time was needed, meaning that a delay would be good and not treason?

  5. But I thought Matty Y. picked up his marker? It was a great success and people love it!

  6. “Despite administration promises….”

    Isn’t that the opening line for any story about anything to do with this administration?

    The repubs will probably take the house and senate in november. Can I start cussing them now, or do I have to wait for them not to repeal this abomination?

  7. 45 Years ago our Government and a collection of private industry engineers put a man on the fucking moon.

    Now they can’t even build a functional website that operates even remotely as capable as eHealthinsurance.com.


  8. Weeeeeeeiiiiiiggggeeeelllll, paging Weeeeeeeiiiiiiggggeeeelllll

    1. This is a turd that can’t be polished and even he knows that.

      1. It’s never stopped him from trying before.

  9. I’m guessing the website and related systems are still insecure pieces of shit too.

  10. I am Jack’s complete lack of surprise…

    A missed deadline for completion could “potentially [put] the entire health insurance industry at risk.”

    Well, maybe if the government wasn’t trying to manage the entire health insurance industry we wouldn’t have this problem. I know, I know, that’s crazy talk. Afterall, without the government, poor people would be left on the curb outside of hospitals to die for want of the money to pay, all old people would be reduced to eating catfood, etc.

    1. Apparently, these people never learned that having a single point of failure in any system is Very Very Bad.

      After they learn that one, perhaps they will be ready for the lesson that the government is always a single point of failure.

  11. “Despite Administration Promises,”…

    No need to say more!

  12. Oh, and the ol’ ‘tip of the iceberg’!

    “States told to find way to clear Medicaid backlog”
    “California had the largest backlog of 900,000 people in its Medicaid program as of May, out of 1.9 million people who enrolled
    The letters stated that those states had 10 days to come up with a response plan, but health advocates say there is no clear deadline for actually clearing the backlog.”

    Whenever, duuuuuuuuuuuude.

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